Construction in South Africa - Key Trends and Opportunities to 2018

Published: Sep, 2014 | Pages: 82 | Publisher: Timetric
Industry: Construction | Report Format: Electronic (PDF)


Synopsis
This report provides detailed market analysis, information and insights into the South African construction industry, including:
The South African construction industry's growth prospects by market, project type and type of construction activity
Analysis of equipment, material and service costs across each project type in South Africa
Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the South African construction industry
Analyzing the profiles of the leading operators in the South African construction industry.
Data highlights of the largest construction projects in South Africa 

Summary
The South African construction industry registered a compound annual growth rate (CAGR) of 8.65% during the review period (2009-2013). This growth was supported by increased government spending in the country's residential, infrastructural and commercial construction projects. The residential and infrastructure construction markets drove growth, as the preparation for both the World Cup and 2009 Confederations Cup supported improvements and acceleration in construction activities. Moreover, the government has also adopted the National Infrastructure Plan (NIP) and announced National Budget estimates in order to develop the country's infrastructure. Therefore, a large number of announced projects will provide hope for the construction industry, as corruption, mismanagement and price fixing within the industry all threaten to undermine the proper implementation of these developments. Timetric expects the South African construction industry to record a CAGR of 8.93% over the forecast period (2014-2018). 
Scope
This report provides a comprehensive analysis of the construction industry in South Africa. It provides:
Historical (2009-2013) and forecast (2014-2018) valuations of the construction industry in South Africa using construction output and value-add methods
Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
Analysis of key construction industry issues, including regulation, cost management, funding and pricing
Detailed profiles of the leading construction companies in South Africa 
Reason To Buy
 Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies
Assess market growth potential at a micro-level with over 600 time-series data forecasts
Understand the latest industry and market trends
Formulate and validate business strategies using Timetric's critical and actionable insight
Assess business risks, including cost, regulatory and competitive pressures
Evaluate competitive risk and success factors 
Key Highlights
 In nominal terms, the total construction value add in South Africa registered a nominal CAGR of 9.97% during the review period. The value add is anticipated to record a nominal forecast-period CAGR of 7.70%, driven by a decline in the confidence of building construction and civil engineering construction. According to the Bureau for Economic Research (BER), the building confidence index declined by 11.0 index points, going from 52.0 points in the first quarter of 2014 to 41.0 points in the second. The civil confidence index declined by 11.0 index points over the same period, going from 55.0 to 44.0 points. The total outlook for construction in South Africa over the forecast period remains positive. 
The South African Construction industry is undergoing a period of unfavorable conditions as a consequence of economic indicators, which continue to disappoint the building industry. There are fewer projects in the construction market with a higher interest rate, dampening the country's growth of real estate construction projects. According to BER, the building confidence index declined by 11.0 index points, going from 52.0 in the first quarter of 2014 to 41.0 in the second. This was largely due to the weak demand from private sector, prolonged strike in platinum sector, acceleration in the project postponement rate, increasing interest rates and declining exports. The industry is set to rebound over the forecast period, due to improved economic conditions, increase in profitability, and investment in the construction industry. 
The South African government is taking various initiatives to improve the country's transport infrastructure. The National Transport Master Plan 2050 (Natmap) was approved by the South African government in 2010, with an aim to expand the country's rail network and ports with an investment of ZAR750.0 million (US$102.5 million). The government adopted the National Infrastructure Plan in 2012, with the objective of investing ZAR827.0 billion (US$100.7 billion) over a period of three years, from 2013-2014 until 2015-2016, to build and upgrade infrastructure in South Africa. Additionally, with the Public Transport Strategy (2007-2020), the government plans to improve the country's public transport by establishing the integrated rapid public transport network (IRPTN), and developing rail corridors and bus rapid transit systems (BRTs).  
The South African construction market will also be supported by the country's macroeconomic factors, which include mortgage loans, interest rate and inflation. According to the latest data from Absa Bank Ltd (ABSA), private sector mortgage loans (which comprise both commercial and residential mortgage loans) recorded a growth of 3.4% at the end of June 2014 and annually, with commercial and residential mortgage loans recording respective growths of 6.1% and 2.4% in the first half of 2014. Moreover, mortgage interest rates climbed by 50.0 basis points in January 2014, going from 8.5% in 2013 to 9.0% annually, while inflation maintained stability in the first half of 2014, at 5.3%, after increasing from 3.5% in 2011, 4.6% in 2012 and 5.2% in 2013. Inflation and mortgage interest rates are expected to increase further in 2014 and 2015, depending on present global and economic trends, highlighting the growth prospects of the South African construction market. 
According to the National Budget, the South African government increased its expenditure for social infrastructure, which includes the development of education, health and other formal communities. The expenditure is expected to increase from ZAR30.0 billion (US$3.7 billion) in 2012-2013 to ZAR43.0 billion (US$4.0 billion) in 2016-2017. The main emphasis will be on the refurbishment of clinics and hospitals, and clearance of school infrastructure backlogs. This will contribute to the institutional construction market's continued expansion over the forecast period.

 1 Executive Summary
2 Market Overview
2.1 Key Trends and Issues
2.2 Benchmarking by Market Size and Growth
3 Commercial Construction
3.1 Performance Outlook
3.2 Key Trends and Issues
3.3 Data and Project Highlights
4 Industrial Construction
4.1 Performance Outlook
4.2 Key Trends and Issues
4.3 Data and Project Highlights
5 Infrastructure Construction
5.1 Performance Outlook
5.2 Key Trends and Issues
5.3 Data and Project Highlights
6 Institutiol Construction
6.1 Performance Outlook
6.2 Key Trends and Issues
6.3 Data and Project Highlights
7 Residential Construction
7.1 Performance Outlook
7.2 Key Trends and Issues
7.3 Data and Project Highlights
8 Company Profile: Murray & Roberts Holdings Ltd
8.1 Murray & Roberts Holdings Ltd - Company Overview
8.2 Murray & Roberts Holdings Ltd - Business Description
8.3 Murray & Roberts Holdings Ltd - Main Services
8.4 Murray & Roberts Holdings Ltd - History
8.5 Murray & Roberts Holdings Ltd - Company Information
8.5.1 Murray & Roberts Holdings Ltd - key competitors
8.5.2 Murray & Roberts Holdings Ltd - key employees
9 Company Profile: Wilson Bayly Holmes-Ovcon Ltd
9.1 Wilson Bayly Holmes-Ovcon Ltd - Company Overview
9.2 Wilson Bayly Holmes-Ovcon Ltd - Business Description
9.3 Wilson Bayly Holmes-Ovcon Ltd - Main Products and Services
9.4 Wilson Bayly Holmes-Ovcon Ltd - History
9.5 Wilson Bayly Holmes-Ovcon Ltd - Company Information
9.5.1 Wilson Bayly Holmes-Ovcon Ltd - key competitors
9.5.2 Wilson Bayly Holmes-Ovcon Ltd - key employees
10 Company Profile: Group Five Ltd
10.1 Group Five Ltd - Company Overview
10.2 Group Five Ltd - Business Description
10.3 Group Five Ltd - Main Products and Services
10.4 Group Five Ltd - History
10.5 Group Five Ltd - Company Information
10.5.1 Group Five Ltd - key competitors
10.5.2 Group Five Ltd - key employees
11 Company Profile: Aveng Ltd
11.1 Aveng Ltd - Company Overview
11.2 Aveng Ltd - Business Description
11.3 Aveng Ltd - Main Products and Services
11.4 Aveng Ltd - History
11.5 Aveng Ltd - Company Information
11.5.1 Aveng Ltd - key competitors
11.5.2 Aveng Ltd - key employees
12 Company Profile: Basil Read Holdings Ltd
12.1 Basil Read Holdings Ltd - Company Overview
12.2 Basil Read Holdings Ltd - Business Description
12.3 Basil Read Holdings Ltd - Main Services
12.4 Basil Read Holdings Ltd - History
12.5 Basil Read Holdings Ltd - Company Information
12.5.1 Basil Read Holdings Ltd - key competitors
12.5.2 Basil Read Holdings Ltd - key employees
13 Market Data Alysis
13.1 Construction Output and Value Add
13.1.1 Construction output by project type
13.1.2 Construction output by cost type
13.1.3 Construction output by activity type
13.1.4 Construction value add by project type
13.2 Commercial Construction
13.2.1 Commercial construction output by project type
13.2.2 Commercial construction output by cost type
13.2.3 Commercial construction output by activity type
13.2.4 Commercial construction value add by project type
13.3 Industrial Construction
13.3.1 Industrial construction output by project type
13.3.2 Industrial construction output by cost type
13.3.3 Industrial construction output by activity type
13.3.4 Industrial construction value add by project type
13.4 Infrastructure Construction
13.4.1 Infrastructure construction output by project type
13.4.2 Infrastructure construction output by cost type
13.4.3 Infrastructure construction output by activity type
13.4.4 Infrastructure construction value add by project type
13.5 Institutiol Construction
13.5.1 Institutiol construction output by project type
13.5.2 Institutiol construction output by cost type
13.5.3 Institutiol construction output by activity type
13.5.4 Institutiol construction value add by project type
13.6 Residential Construction
13.6.1 Residential construction output by project type
13.6.2 Residential construction output by cost type
13.6.3 Residential construction output by activity type
13.6.4 Residential construction value add by project type
14 Appendix
14.1 What is This Report About?
14.2 Definitions
14.3 Summary Methodology
14.4 Methodology
14.5 Contact Timetric
14.6 About Timetric
14.7 Timetric's Services
14.8 Disclaimer


List of Tables
Table 1: Benchmarking with Other Major Construction Industries
Table 2: Commercial Construction Project 1 - APG - Midrand Mall of Africa - Central Gauteng
Table 3: Commercial Construction Project 2 - SUI - Times Square at Menlyn Maine - South Africa
Table 4: Commercial Construction Project 3 - Trendville - Mogale City Mall Development - Gauteng
Table 5: Industrial Construction Project 1 - KIO - Integrated Steel Plant - South Africa
Table 6: Industrial Construction Project 2 - SAIL - Steel Mill Development - South Africa
Table 7: Industrial Construction Project 3 - RMI - Saldanha Rare Metals Processing Complex - South Africa
Table 8: Infrastructure Construction Project 1 - SADOT - Johannesburg to Durban High-Speed Rail Link - South Africa
Table 9: Infrastructure Construction Project 2 - Transnet - Durban Dig Out Port - KwaZulu-tal
Table 10: Infrastructure Construction Project 3 - DSME - East Coast Shipyard - South Africa
Table 11: Institutiol Construction Project 1 - GPG - CHB Academic Hospital Revitalisation - South Africa
Table 12: Institutiol Construction Project 2 - DHET - Sol Plaatje University - South Africa
Table 13: Institutiol Construction Project 3 - DoH/DoTPW - Tygerberg Hospital Redevelopment - South Africa
Table 14: Residential Construction Project 1 - WCMI - Plettenberg Bay Waterfront Development - Western Cape
Table 15: Residential Construction Project 2 - SZP - New York-esque Estate Development - Johannesburg
Table 16: Residential Construction Project 3 - Tongaat/eThekwini - Cornubia Integrated Human Settlement - South Africa
Table 17: Murray & Roberts Holdings Ltd, Key Facts
Table 18: Murray & Roberts Holdings Ltd, Main Services
Table 19: Murray & Roberts Holdings Ltd, History
Table 20: Murray & Roberts Holdings Ltd, Key Employees
Table 21: Wilson Bayly Holmes-Ovcon Ltd, Key Facts
Table 22: Wilson Bayly Holmes-Ovcon Ltd, Main Products and Services
Table 23: Wilson Bayly Holmes-Ovcon Ltd, History
Table 24: Wilson Bayly Holmes-Ovcon Ltd, Key Employees
Table 25: Group Five Ltd, Key Facts
Table 26: Group Five Ltd, Main Products and Services
Table 27: Group Five Ltd, History
Table 28: Group Five Ltd, Key Employees
Table 29: Aveng Ltd, Key Facts
Table 30: Aveng Ltd, Main Products and Services
Table 31: Aveng Ltd, History
Table 32: Aveng Ltd, Key Employees
Table 33: Basil Read Holdings Ltd, Key Facts
Table 34: Basil Read Holdings Ltd, Main Services
Table 35: Basil Read Holdings Ltd, History
Table 36: Basil Read Holdings Ltd, Key Employees
Table 37: South African Construction Output by Project Type (ZAR Million), 2009-2013
Table 38: South African Construction Output by Project Type (ZAR Million), 2013-2018
Table 39: South African Construction Output by Cost Type (ZAR Million), 2009-2013
Table 40: South African Construction Output by Cost Type (ZAR Million), 2013-2018
Table 41: South African Construction Output by Activity Type (ZAR Million), 2009-2013
Table 42: South African Construction Output by Activity Type (ZAR Million), 2013-2018
Table 43: South African Construction Value Add by Project Type (ZAR Million), 2009-2013
Table 44: South African Construction Value Add by Project Type (ZAR Million), 2013-2018
Table 45: South African Commercial Construction Output by Project Type (ZAR Million), 2009-2013
Table 46: South African Commercial Construction Output by Project Type (ZAR Million), 2013-2018
Table 47: South African Commercial Construction Output by Cost Type (ZAR Million), 2009-2013
Table 48: South African Commercial Construction Output by Cost Type (ZAR Million), 2013-2018
Table 49: South African Commercial Construction Output by Activity Type (ZAR Million), 2009-2013
Table 50: South African Commercial Construction Output by Activity Type (ZAR Million), 2013-2018
Table 51: South African Commercial Construction Value Add by Project Type (ZAR Million), 2009-2013
Table 52: South African Commercial Construction Value Add by Project Type (ZAR Million), 2013-2018
Table 53: South African Industrial Construction Output by Project Type (ZAR Million), 2009-2013
Table 54: South African Industrial Construction Output by Project Type (ZAR Million), 2013-2018
Table 55: South African Industrial Construction Output by Cost Type (ZAR Million), 2009-2013
Table 56: South African Industrial Construction Output by Cost Type (ZAR Million), 2013-2018
Table 57: South African Industrial Construction Output by Activity Type (ZAR Million), 2009-2013
Table 58: South African Industrial Construction Output by Activity Type (ZAR Million), 2013-2018
Table 59: South African Industrial Construction Value Add by Project Type (ZAR Million), 2009-2013
Table 60: South African Industrial Construction Value Add by Project Type (ZAR Million), 2013-2018
Table 61: South African Infrastructure Construction Output by Project Type (ZAR Million), 2009-2013
Table 62: South African Infrastructure Construction Output by Project Type (ZAR Million), 2013-2018
Table 63: South African Infrastructure Construction Output by Cost Type (ZAR Million), 2009-2013
Table 64: South African Infrastructure Construction Output by Cost Type (ZAR Million), 2013-2018
Table 65: South African Infrastructure Construction Output by Activity Type (ZAR Million), 2009-2013
Table 66: South African Infrastructure Construction Output by Activity Type (ZAR Million), 2013-2018
Table 67: South African Infrastructure Construction Value Add by Project Type (ZAR Million), 2009-2013
Table 68: South African Infrastructure Construction Value Add by Project Type (ZAR Million), 2013-2018
Table 69: South African Institutiol Construction Output by Project Type (ZAR Million), 2009-2013
Table 70: South African Institutiol Construction Output by Project Type (ZAR Million), 2013-2018
Table 71: South African Institutiol Construction Output by Cost Type (ZAR Million), 2009-2013
Table 72: South African Institutiol Construction Output by Cost Type (ZAR Million), 2013-2018
Table 73: South African Institutiol Construction Output by Activity Type (ZAR Million), 2009-2013
Table 74: South African Institutiol Construction Output by Activity Type (ZAR Million), 2013-2018
Table 75: South African Institutiol Construction Value Add by Project Type (ZAR Million), 2009-2013
Table 76: South African Institutiol Construction Value Add by Project Type (ZAR Million), 2013-2018
Table 77: South African Residential Construction Output by Project Type (ZAR Million), 2009-2013
Table 78: South African Residential Construction Output by Project Type (ZAR Million), 2013-2018
Table 79: South African Residential Construction Output by Cost Type (ZAR Million), 2009-2013
Table 80: South African Residential Construction Output by Cost Type (ZAR Million), 2013-2018
Table 81: South African Residential Construction Output by Activity Type (ZAR Million), 2009-2013
Table 82: South African Residential Construction Output by Activity Type (ZAR Million), 2013-2018
Table 83: South African Residential Construction Value Add by Project Type (ZAR Million), 2009-2013
Table 84: South African Residential Construction Value Add by Project Type (ZAR Million), 2013-2018
Table 855: Timetric Construction Market Definitions